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- Title
Section 280E and the Cannabis Industry.
- Authors
Kadish, Stephen L.; Haren, Thomas G.; Rownd, James H.
- Abstract
Section 280E of the Internal Revenue Code was upheld by the United States Tax Court, in Northern California Small Business Assistants Inc. v. Commissioner. Section 280E denies all trade or business deductions and credits for trafficking in controlled substances. Despite legalization in several states, under federal law marijuana remains a Schedule I controlled substance. The United States Tax Court held that Section 280E is not a penalty provision and thus does not violate the Eighth Amendment, that the restriction of Section 280E is not limited only to the business expenses deductible under Section 162, and that Section 280E is not limited to only illegal marijuana activities despite the use of the word "trafficking" in Section 280E.
- Subjects
UNITED States. Tax Court; INTERNAL revenue law; TAX courts; MARIJUANA industry; MARIJUANA laws; OPERATING costs
- Publication
Journal of Taxation of Investments, 2020, Vol 37, Issue 4, p29
- ISSN
0747-9115
- Publication type
Article